Patient Inquiry

What are the common causes of payment denials?

Denial is an unfortunate term used for the portion of correspondence from insurance carriers that does not include payment for services. Although the term denial has a negative connotation, most of the correspondence in this category actually leads to timely payment. The percentage of non-payments varies by specialty and payor mix. The majority of non-payments are requests for information from the patient, or determinations of patient financial responsibility.

Payment denials from payors come in many forms but basically breakdown into three types:

Information errors that are easy to correct

Requests for additional information

Benefit determinations that require payment from the patient


The first type of denial is typically the insurance plan information itself or a piece of demographic information that does not match the carrier’s records. We may occasionally ask your staff to verify a date of birth, supplemental insurance plan, or social security number before submitting a corrected claim. If the plan information is incorrect, or obsolete, Practice Management attempts to contact the patient by telephone to review and update the insurance plan information. If we are unable to reach the patient by telephone, a patient statement is automatically forwarded. The statement indicates the problem with the claim and also allows the patient to provide updated insurance information. This type of denial is the only one of the three that we can avoid. By making sure that patient registrations are updated or confirmed annually and changes forwarded to Practice Management, we can reduce this type of denial to a minimum. Patients may groan at the thought of completing or reviewing another form, however, it is clearly a required standard practice for all office based physicians.

The second type, the requests for information, are the most tedious and annoying. The payor may request information from the patient and refuse to process the claim until the patient responds. In other cases, the payor may request medical records from the provider. When a claim is pending action from the patient, the carrier notifies the patient in writing, Practice Management also forwards a statement indicating that the patient must contact their plan and that the balance due is a patient responsibility.

The third type of denial is determined by the patient’s insurance coverage and cannot be altered. These are not actually denials but are instead determinations of patient financial responsibility. Examples include pre-existing condition exclusions, deductibles, limited preventative benefit, and limited coverage for specific services. In this situation, altering information such as diagnoses to “help the patient get the service covered” is a clear case of insurance fraud. When services are determined to be the financial responsibility of the patient, the balance due must be paid by the patient. Practice Management forwards a patient statement including a description of the reason given by the insurance carrier.

In each case, Practice Management processes the denial information with the same speed as charge and payment data. Average turn-around time for entry of your data is within two business days of receipt or less.